Smolic and Secretary to the Department of Family and Community Services - [2002] AATA 467

DECISION AND REASONS FOR DECISION [2002] AATA 467

ADMINISTRATIVE APPEALS TRIBUNAL        Nº V2001/1678
GENERAL ADMINISTRATIVE DIVISION
  Re:         DRAGO SMOLIC
  Applicant
  And:       SECRETARY TO THE
  DEPARTMENT OF FAMILY AND
  COMMUNITY SERVICES
  Respondent

DECISION

Tribunal:       G.D. Friedman, Member
Date:             29 May 2002
Place:            Melbourne

Decision:For reasons given orally at the hearing, the Tribunal sets aside the decision under review and substitutes a decision that at the time of his claim for age pension on 22 May 2001 the applicant was an Australian resident for the purposes of s7(2) of the Social Security Act 1991.

(sgd) G.D. Friedman
Member

SOCIAL SECURITY - age pension - qualification - whether residing in Australia
Social Security Act 1991 s7(2), 7(3)
Social Security (Administration) Act 1999 s29(1)

Hafza v Director-General of Social Security (1985) 6 FCR 444
Levene v Inland Revenue Commissioners [1928] AC 217
Re Galati and Director-General of Social Security (1984) 6 ALD 538
Re Goodfellow and Department of Social Security (AAT 8296, 8 October 1992)
Re Raad and Department of Family and Community Services [2000] AATA 387

REASONS FOR DECISION

29 May 2002 G.D. Friedman, Member

This is an application for review of a decision of the Social Security Appeals Tribunal (SSAT) dated 29 November 2001, which affirmed a decision of Centrelink dated 28 August 2001. In the Centrelink decision an authorised review affirmed a decision dated 22 May 2001 to refuse the applicant's application for age pension because he was not an Australian resident at the time of his application.
At the hearing of this matter on 29 May 2002 Mr J. Singh, of Counsel, represented the applicant and Mr M. Todd, advocate with Centrelink, represented the respondent.
BACKGROUND
The applicant was born in Croatia on 28 December 1934 and completed a technical qualification as a structural boilermaker/welder. In May 1963 he migrated to Australia and became an Australian citizen. In November 1997 he sold his house and in April 1998 he moved to Croatia with his wife and daughter. On 28 November 1999 he returned alone to Australia. On 22 December 1999 the applicant applied for age pension and Centrelink refused the application. On 3 May 2000 the SSAT affirmed the decision and on 23 October 2000 the Tribunal affirmed the decision by the SSAT. The applicant lodged further claims with Centrelink on 15 June 2000, 9 August 2000 and 22 May 2001. On 28 December 2001 the applicant lodged an application with the Tribunal for review of the decision by the SSAT dated 29 November 2001.
EVIDENCE
The Tribunal received into evidence the documents lodged under s37 of the Administrative Appeals Tribunal Act 1975 (T1-T19), together with two exhibits (Exhibits A1 and A2) tendered on behalf of the applicant.
The applicant gave oral evidence and told the Tribunal that on arrival in Australia he obtained a certificate that enabled him to obtain work as a boilermaker. On 19 September 1964 he married Darinka Cosic. During a visit to Croatia in 1984 he and his wife adopted their daughter, Marta, born on 13 June 1984, and brought her back to Australia. He said that since then they have undertaken a number of overseas trips and members of both extended families have visited Australia.
The applicant explained that in 1996 he and his wife met Marta's biological mother who requested that Marta learn the Croatian language and complete her secondary education in Croatia. After this visit the applicant's wife decided that she would return to Croatia for this reason and to care for her elderly parents. The applicant stated that he agreed reluctantly to return to Croatia and that his wife had insisted that they sell the family home in Australia. He said that following the sale of their house on 22 November 1997 he went to Croatia and his wife and daughter joined him there. Soon after their arrival in Croatia they purchased a house and furnished it with goods sent from Australia. The applicant said that he has a sister in Australia and a brother in Croatia.
The applicant stated that he returned to Australia on 28 November 1999 because he did not enjoy living in Croatia, he had few friends or family there, he was unable to obtain employment or social security benefits and he missed his friends in Australia. He was adamant that he intends to reside in Australia permanently. He said that he considers himself separated from his wife and has not returned to Croatia or seen her for 30 months. He maintains regular telephone contact with his daughter and sends money and gifts to her, and occasionally speaks to his wife. He explained that he has not initiated divorce proceedings because he is a devout Catholic and divorce would be contrary to his religious beliefs. He added that he has not initiated proceedings to sell the house in Croatia because his wife and daughter are residing there, and at this stage any plans to sell would be premature, particularly as his wife and daughter may decide to return to Australia in the future.
The Tribunal was told that the applicant has demonstrated stable accommodation since his return from Croatia and has lived in a rented flat at the same address in Coburg since 4 December 2000, shortly after his arrival in Australia. He has a 12-month lease which has been extended until 4 December 2003.
The applicant produced an undated letter written by his wife and translated on 3 February 2002. In the letter Ms Smolic stated that she decided to return to Croatia in 1998 because of her parents. She said that:
My husband came with me for two years to please me but decided to return after 20 months because he wasn't happy living in Croatia. I however wasn't ready to come back because my father had passed away in the meantime. I have asked Drago to return to Croatia on a number of occasions, but he has said that he will not return and will remain in Australia. I now accept this and when I sort out my current situation I will join him in Australia.
The applicant said that over the years in Australia he had established a wide range of friendships through his involvement with his local soccer club and the Croatian church. The applicant explained that despite his reluctance to leave Australia he endeavoured to make the move a success. He said that Marta had visited him in July/August 2000 and he believed that when she has completed her secondary education in Croatia she may decide to live in Australia.
With regard to his financial arrangements the applicant stated that he continues to draw upon his investments of $85,000 in Australia to support his current living needs. He said that he does not send any money to his wife because she retained about $20,000 that remained after the purchase of the house in Croatia.
Karmelo Paseta gave oral evidence to the Tribunal. He said that he has been a friend of the applicant for more than 30 years, and the applicant stayed with him after returning from Croatia in 1999. Mr Paseta told the Tribunal that at that time the applicant did not discuss with him the possibility of applying for the age pension.
CONSIDERATION OF THE ISSUES
Section 29(1) of the Social Security (Administration) Act 1999 provides that a claim for a pension or benefit may only be made by a person who is in Australia and is an Australian resident.
The term Australian resident is defined in s7(2) of the Social Security Act 1991 (the Act):
An Australian resident is a person who:
(a)resides in Australia; and
(b)is one of the following:
(i)an Australian citizen;
(ii)the holder of a permanent visa;
(iii)a special category visa holder who is a protected SCV holder.

Section 7(3) sets out the criteria to which regard must be had in deciding whether a person is residing in Australia:

(a)the nature of the accommodation used by the person in Australia; and
(b)the nature and extent of the family relationships the person has in Australia; and
(c)the nature and extent of the person's employment, business or financial ties with Australia; and
(d)the nature and extent of the person's assets located in Australia; and
(e)the frequency and duration of the person's travel outside Australia; and
(f)any other matter relevant to determining whether the person intends to remain permanently in Australia..

Ms Singh submitted that there has been a significant change in circumstances since the applicant's earlier applications for age pension. He noted that the applicant has remained in Australia since November 1999, has not seen his wife during this period, and has maintained stable accommodation. Mr Singh also submitted that the letter from Ms Smolic demonstrates that the applicant has made clear to her his intention to remain in Australia permanently and to remain separated from her. Mr Singh stated further that the applicant could have initiated divorce proceedings to strengthen his case but chose to adhere to his principles and beliefs, and should not be penalised for doing so.
Mr Singh referred the Tribunal to Hafza v Director-General of Social Security (1985) 6 FCR 444, in which Wilcox J discussed the question of residence at pages 449 and 450:
…As a general concept residence includes two elements: physical presence in a particular place and the intention to treat that place as home; at least for the time being, not necessarily forever. …
Physical presence and intention will co-incide for most of the time. But few people are always at home. Once a person has established a home in a particular place …It is important to observe firstly, that a person may simultaneously be a resident in more than one place … and, secondly, that the application of the general concept of residence to any particular case must depend upon the wording, and underlying purposes, of the particular statute in relation to which the question arises. But, where the general concept is applicable, it is obvious that, as residence of a place in which a person is not physically present depends upon an intention to return and to continue to treat that place as "home", a change of intention may be decisive of the question whether residence in a particular place has been maintained.

Mr Singh also referred to the decisions of Levene v Commissioner of Inland Revenue [1928] A.C.217, Re Galati and Director-General of Social Security (1984) 6 ALD 538, Re Goodfellow and Department of Social Security (AAT 8296, 8 October 1992) and Re Raad and Department of Family and Community Services [2000] AATA 387. He submitted that the authorities show that an overall approach should be taken to the question of the applicant's intention, and that this should be ascertained by the actions of the applicant since making the decision to move to Croatia and in the circumstances of his return.

Mr Todd submitted that the evidence demonstrates that the applicant's focus remains with his family, and his immediate family remains in Croatia. He said that the ownership of the house in Croatia outweighs the effect of a lease arrangement in Australia, and the intention of the applicant is to return to Croatia.
In reaching a decision the Tribunal takes into account the oral and written evidence, together with submissions made at the hearing. The Tribunal finds that for family reasons the applicant and his wife sold their home in Australia and moved to Croatia on a permanent basis in April 1998. The Tribunal takes into account that his wife and daughter remain in the home purchased in Croatia, the applicant has a brother and extended family in Croatia, and there is no evidence that he intends to sell the house that he purchased in that country.
The Tribunal finds the applicant to be a credible witness and accepts his evidence that at present and at the relevant time he has separated from his wife but has not commenced divorce proceedings because of his religious beliefs. The Tribunal also accepts the evidence of the applicant's wife that she has not ruled out a return to Australia. Therefore the Tribunal finds that the action of the applicant in not seeking to sell the house in Croatia at this stage is reasonable, especially as his wife and daughter are still occupying the property and may return to Australia in the future.
The Tribunal has considered each of the factors listed in s7(3) of the Act:
(a)       the nature of the accommodation used by the person in Australia
The Tribunal notes that the applicant lives in a rented flat on a 12-month lease and has done so continuously since 4 December 2000.
(b)the nature and extent of the family relationships the person has in Australia
The applicant's wife, daughter, and brother reside in Croatia, together with extended family members. A sister and her family live in Australia.
(c)the nature and extent of the person's employment, business or financial ties within Australia
At the time of his claim for age pension the applicant was not working. His major financial ties appear to be investments of about $85,000 held in Australia.
(d)       the nature and extent of the person's assets located in Australia
The Tribunal accepts that the applicant intends to maintain his investments in Australia, and that he draws upon them to support himself.
(e)       the frequency and duration of the person's travel outside Australia
Before his move to Croatia, the applicant made a number of trips to Croatia in order to visit family and friends, but has not been to Croatia since his return to Australia on 28 November 1999.
(f)Any other matter relevant to determining whether the person intends to remain permanently in Australia
The Tribunal notes that the applicant has a significant social network of friends and community contacts in Australia. He has resumed his former lifestyle and has given no indication that a further move to Croatia is contemplated.
In applying these findings to Hafza, the Tribunal accepts the submission by Mr Singh that at the time of the claim the applicant's connection with Australia was stronger than his connection with Croatia, he treated Australia as his home and his intention was to continue to treat Australia as his home. There is no evidence before the Tribunal that the main reason for the applicant's return to Australia was for the purpose of applying for the age pension. For these reasons the Tribunal finds at the time of his application for age pension the applicant was a person residing in Australia for the purposes of s7(2) of the Act.

DECISION

For reasons given orally at the hearing, the Tribunal sets aside the decision under review and substitutes a decision that at the time of his claim for age pension on 22 May 2001 the applicant was an Australian resident for the purposes of s7(2) of the Social Security Act 1991.

I certify that the twenty-two [22] preceding paragraphs are a true copy of the reasons for the decision of:
G.D.Friedman, Member
(sgd)       Olympia Sarrinikolaou
              Clerk
Date of hearing:  29 May 2002
Date of decision:  29 May 2002
Counsel for applicant:                 Mr J. Singh
Solicitor for applicant:                  Baker and Armstrong
Advocate for respondent:            Mr M. Todd, Centrelink